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Energy Wholesale Market Review, 28 August 2020

Headlines

Most power and gas contracts rose significantly this week, continuing rises seen in recent weeks. Day-ahead gas rose 32.5% to 26.50p/th as a result of increased gas for power demand and an outage to the Forties pipeline. Day-ahead power rose 15.2% to £47.25/MWh on decreasing wind generation throughout the latter stages of the week. September 20 gas was up 26.9% at 26.95p/th, and October 20 gas increased 19.6% to 29.15p/th. All seasonal gas contracts boosted this week, up by 7.7% on average, while both winter 20 and summer 21 gas increased 9.4% and 11.0% respectively, lifting to 38.65p/th and 34.20p/th. All seasonal power contracts followed the gas markets higher, up on average by 6.8%, as winter 20 and summer 21 expanded 8.3% and 8.6% respectively, rising to £51.00/MWh and £44.55/MWh. Brent crude oil prices remained relatively unchanged last week averaging $45.37/bl, with prices now settled following recent spikes. Market oversupply issues have been overshadowed this week amongst growing concern surrounding Hurricane Laura, which has this week been upgraded to a Category 4.

Baseload electricity
Day-ahead power rose 15.2% to £47.25/MWh on decreasing wind generation throughout the latter stages of the week. September 20 power climbed 16.9% at £42.95/MWh and October 20 power increased 11.4% to £43.5/MWh.		Q420 power moved 8.5% higher to £49.00/MWh. The annual October 20 contract rose 8.4% to £47.78/MWh, 5.7% lower than the same time last year (£50.69/MWh).
Forward curve comparison		Annual October Contract
Peak electricity
Day-ahead peak power was up 2.2% to £47.00/MWh. September 20 peak power gained 8.4% at £46.09/MWh, and October 20 peak power increased 3.8% to £48.65/MWh.		The annual October 20 peak power lost 4.6% to £52.89/MWh. This is 7.8% lower than the same time last year (57.34/MWh).
Forward curve comparison		Annual October contract
Seasonal power prices
Seasonal baseload power contracts		Seasonal baseload power curve
All seasonal power contracts boosted this week, up on average by 6.8%. Winter 20 and summer 21 expanded 8.3% and 8.6% respectively, rising to £51.00/MWh and £44.55/MWh.		All seasonal peak power contracts rose this week, up 4.0% on average. Winter 20 and summer 21 peak power increased 4.6% and 4.6% respectively, rising to £58.02/MWh and £47.75/MWh.
Commodity price movements
Oil and Coal		Carbon
Brent crude oil prices remained relatively unchanged last week averaging $45.37/bl, with prices now settled following recent spikes in a near five-month high. Market oversupply issues have been overshadowed this week amongst growing concern surrounding Hurricane Laura, which has this week been upgraded to a Category 4. Some oil facilities in the Gulf of Mexico have evacuated pre-empting the early landfall experienced in South-West Louisiana.		API 2 coal prices dropped 2.2% last week to average $53.98/t. The UN Secretary general announced India must steer away from coal despite its requirement for cheap energy. Despite previous weeks of a slipping EU ETS price, prices rose 6.9% to average €27.75/t this week. The market experienced mixed feedback amid uncertainty surrounding the EUA-December 20 auction.
Wholesale price snapshot